Income and Poverty

Response to the latest poverty numbers

Published: Jun 25, 2015

Author: Peter Kenway

Category: Income and Poverty

The latest official poverty figures for 2013/14 have just been published. In April this year the New Policy Institute published a ‘Nowcasting’ paper in which we looked forward to what those statistics might be in 2014/15, still one year beyond today’s new numbers.

The overwhelming message to take from the latest statistics is that the picture on poverty in 2013/14 is no different from what it was in 2012/13. In particular:

The overall poverty rate, measured after housing costs have been deducted, is 21%, no change on 12/13.

The child poverty rate is 27.7% (3.7m children), up 0.4% on 12/13.

The pensioner poverty rate is 13.8% (1.6m), up 0.5% on 12/13.

The working-age poverty rate is 21.0% (7.9m), down 0.3% on 12/13.

The proportion in people in poverty in working families is 51%, up 1% on 12/13.

Median income, the key reference level for the poverty line, is unchanged at £386 per week (for a couple with no dependent children). This is the first year that the median has not fallen since 2009/10.

How does this compare with the forecast we published on 29 April? The figures we led with were for 2014/15 but we had to compute 2013/14 on the way to getting them. Our forecast for 2013/14, and the actual out-turn, was as follows:

Overall poverty rate: +0.6% (outturn – no change)

Child poverty rate: +1.4% (+0.4%)

Pensioner poverty rate +0.6% (+0.5%)

Working-age rate: +0.2% (-0.3%)

In strict statistical terms, we can defend our estimates on the grounds that they fall within the limits of statistical uncertainty given in the official publication namely 1% either way for the overall rate, 1.8% either way for children, 1.5% for pensioners and 1.1% for working-age. Had we made that clear when we published out forecasts and inserted the necessary caveats then it would have been a reasonable defence.

Poverty in the UK remains deep and widespread. But on these numbers, austerity has not made the overall picture any worse. This is not a good result, but it is a better one than if campaigners’ and forecasters’ worst fears had come to pass. We are happy to acknowledge this. When the full data becomes available later in the summer, we will look to see what it shows about the damage being done to people at the very bottom from the cuts to the social security safety net. Here, not the headline statistics, is where our main concerns lie.

The reason we put out a forecast was because our request to the government last summer to publish the 2013/14 statistics before the election was turned down. Publishing the official numbers in March rather than June would be no more than a return to what was once the standard. In the interests of a properly informed political debate – most elections take place in May – we will be writing to the government again urging it to reconsider its decision for 2016 and beyond.

In the last week, there has been speculation that the government is looking to change the way poverty is measured. The relative poverty measure is one of four measures in the Child Poverty Act, along with absolute poverty, persistent poverty and material deprivation (children who lack everyday items because their parents cannot afford them). It is worth paying the last two measures more attention.

The case has been made by think tanks and commentators that the measure should look at the causes of poverty. Of course the causes need monitoring but they are not the same thing as poverty – poverty is about a lack of resources and in our market society, the resource that matters above all others is money.